ICICI Bank Q4 consolidated net profit up 2.45% at Rs 1,170 crore

The bank, which has suffered reverses following a massive spike in dud assets and also the dismissal of its chief executive Chanda Kochhar over governance issues, however, hinted that the worse is behind.

Helped by the subsidiaries, ICICI Bank post a marginal uptick in consolidated net for the March quarter at Rs 1,170 crore against Rs 1,141 crore, even as it reported a marginal dip in the bottomline standalone.

While almost half of net profit was contributed by a Rs 440-crore interest income on a recent tax refund on a standalone bassi, Rs 489 crore of the group profit came in from the subsidiaries, the second largest private sector lender said on Monday.

On a standalone basis, the bank posted a lower net income of Rs 969 crore for the three months to March down from Rs 1,020 crore a year ago.

For the full year, its profit shrunk a massive 40 per cent to Rs 3,363 crore.

The bank, which has suffered reverses following a massive spike in dud assets and also the dismissal of its chief executive Chanda Kochhar over governance issues, however, hinted that the worse is behind.

"We believe we are at the end of this asset quality cycle and non-performing asset additions are expected to broadly stabilise going forward," executive director-designate Sandeep Batra told reporters over a concall on Monday.

He further said the credit cost--provisioning made on bad loans-printed at a high 3.50 percent but will "improve significantly" to normal levels from FY20 onwards.

Before the accelerated bad loans recognition, its credit costs used to be 1-1.2 per cent.

Among the subsidiaries, the general insurance arm reported an 8 per cent rise in net income at Rs 228 crore, while the life insurance arm reported lower net income at Rs 261 crore during the quarter from Rs 341 crore, and the securities business also booked lower profit at Rs 122 crore.

The asset management business saw a profit growth of 11 per cent during the fiscal to Rs 683 crore.

The bank reported Rs 3,547 crore in fresh slippages during the quarter, including a sugar account that slipped into NPA during the quarter, while the same for the entire fiscal more than halved to Rs 11,039 crore from a high Rs 28,730 crore in FY18.

As a result, the gross non-performing assets ratio improved to 6.70 from 8.84 a year ago and 7.75 sequentially.

The net NPA ratio, calculated after deducting the provisions for bad assets, came in at a 13-quarter low of 2.06 per cent from 4.77 per cent a year ago.

During the quarter, the bank wrote off Rs 7,300 crore of loans and the overall provision coverage ratio improved to 80 per cent from 60.

Share of the advances to companies rated BB and below dipped marginally to Rs 17,525 crore.

On its exposure to the struggling Anil Ambani group, Batra declined to give any details saying overall advances to low-rated companies are as indicated earlier.

It classified a Rs 276-crore exposure to the bankrupt infra lender IL&FS as non-performing during the quarter, for which it has a provision of Rs 145 crore.

It also has a non-fund exposure of Rs 545 crore to the group and has set aside Rs 468 crore as provisions against it.

The core net interest income rose 27 per cent to Rs 7,620 crore on a 17 per cent loan growth and an expansion in net interest margin to 3.72 per cent from 3.24 per cent.

Batra explained that there was a Rs 440-crore interest gains on tax refund which also helped the interest income and if one excludes this income, the net interest margin would have still printed at a wider 3.52 per cent.

It is looking at maintaining or improving the FY19 full year NIM of 3.42 per cent in FY20, Batra said.

There was a sharp decline in the other income to Rs 3,621 crore from Rs 5,678 crore a year ago, which was attributed to a Rs 3,000-crore gain on stake sale in ICICI Securities in the year ago period, but the management stressed that the core fee income has grown 15 percent during the reporting quarter.

The bank witnessed a 14 percent growth in corporate advances during the year, 20 per cent in small businesses, while the overseas book shrunk.

It refused to share an outlook for FY20, maintaining that it will grow faster than the industry.

The bank is wary of commercial real estate or developers loans and kisan credit cards due to the rash of farm loan waivers and also the BB and below advances which constitute 3 per cent of its overall advances, Batra said.

The bank saw a 16 per cent deposit growth in FY19 and share of the low-cost current and savings account deposits stood at 49 per cent.

Its standalone capital adequacy stood at 16.89 per cent, including 15 per cent in tier-I.

The bank scrip closed 0.11 per cent lower at Rs 401.40 on the BSE, as against a correction of 0.93 per cent on the benchmark.